REPSOL POSTS FIRST QUARTER 1999 NET INCOME OF 38,429 MILLION PESETAS (230.96 MILLION EUROS)

Repsol�s net income for the first quarter of 1999 was 38,429 million pesetas, (230.96 million euros), which was 0.4% higher than in the first quarter of 1998. Operating income, at 70,427 million pesetas (423.27 million euros) showed a drop of 1.1% on the previous year�s performance, whereas cash-flow was 7.2% up, at 102,425 million pesetas (615.59 million euros).

This profit was achieved within a very difficult international context, when sharp falls in income were posted by all oil companies and oil prices showed record lows. In addition, the chemical activity was passing through the low part of its cycle, with very low margins on base and derivative products, and there was a narrowing of international refining margins.

By areas of activity, these are the highlights for the first quarter 1999:

In Exploration and Production, operating income fell 74.1% over year earlier figures, to 1,759 million pesetas. This drop was basically due to low oil prices, which were 24% lower in comparison to first quarter 1998, at $10.67 per barrel. Net production of hydrocarbons for the first quarter was 3.17 million tonnes of oil equivalent, showing a quarterly year-on-year rise of 3.6%.

First quarter 1999 operating income for last year from the Refining and Marketing area was 7% up over the same period last year, at 34,059 million pesetas. International refining margins fell substantially in European and Latin American markets. As for marketing, it is worth mentioning the increase of 4.6% in sales in gasoline and gas-oil.

Operating income from Chemicals was 64.4% down on the previous year, at 3,491 million pesetas. This lower performance was basically the outcome of a general narrowing of international margins on base and derivative chemicals, caused by the economic crisis in developing countries. However, this negative effect of low margins was partially curtailed by an 8% rise in sales.

In Gas and Electricity, first quarter operating income showed an improvement of 36.1% over the preceding year, reaching 31,657 million pesetas. This good performance mainly came from higher sales of LPG and natural gas because of colder weather in 1999 than in the first quarter of 1998. LPG sales outside Spain also rose. In the natural gas sector, sales were higher and the customer list grew. In consolidated terms, the Gas Natural Group distributes gas to over 4,819,000 residential and commercial customers, showing an increase of 91,000 customers over the quarter, 62,000 of these in Spain, 12,000 in Argentina, and the remainder in Colombia, Mexico and Brazil.

Investments made by Repsol over the first quarter 1999 amounted to 368,532 million pesetas (2,214.92 million euros), in comparison to 65,781 million pesetas in the previous year. This significant rise was basically caused by the acquisition of a 14.99% stake in YPF, made in January last.

One of the most important events this quarter was Repsol�s announcement on April 29^th last that it was launching a cash tender offer on the 85.01% of YPF capital equity it did not already own. The tender offer opened in the United States on April 30th last, and will open in Argentina on May 24th next. In both cases, it will expire on June 23rd. The price offered is $44.78 per share or ADR.

Also, at the liquefied natural gas plant on Trinidad and Tobago (Atlantic LNG), where Repsol holds a 20% stake, the first shipment of liquefied natural gas started on April 19^th last.

Repsol signed an agreement with the Mexican company GIRSA, to form an alliance between both companies in the synthetic rubber businesses. This joint venture will become one of the world�s top three producers of specialty solution rubber, and the second largest producer of hydrogenated thermoplastic rubber. Also in chemicals, Repsol and DSM signed an agreement to set up a 50/50 joint venture to carry out their acrylonitrile marketing activities for countries outside Europe.

At Repsol�s Annual General Shareholders Meeting, held on March 24th last, a resolution was passed re-denominating Repsol equity capital in euros, and authorising a "split" on the nominal value of each share. This has become 1 euro, and the overall number of outstanding shares is 900 million, after reducing equity capital by 1,518,156.58 euros. Thus, Repsol�s equity capital stands at 900 million euros.

 REPSOL COMPARATIVE BALANCE SHEET

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 REPSOL SUMMARISED INCOME STATEMENT

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REPSOL COMPARATIVE BALANCE SHEET

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